3 Length of notice: statutory requirements
(a)Mandatory Twelve Months Notice to Quit
7.10 At common law, in the absence of express provision in the contract of tenancy, a yearly agricultural tenancy was terminable on six months’ notice.
Agricultural holdings are, however, subject to special statutory provisions. By virtue of s 25(1) of the 1986 Act, a notice to quit an agricultural holding, or part of a holding, will be invalid if it purports to terminate the tenancy before the expiry of 12 months from the end of the then current year of tenancy. Any provision to the contrary in the contract of tenancy is to be disregarded, and contracting out is therefore forbidden. The basic rule, then, is that at least 12 months’ notice to quit must be given, ending on a contractual term date of the tenancy. Minor errors in describing the contractual termination date may be excused, following the ruling in Mannai Investments v Eagle Star Holdings,40 but wherever possible the termination date should be accurately specified in the notice to quit. For the purpose of calculating the 12-month period, the date on which the notice was served is included but the date of its expiry is not.41 The notice to quit is deemed to expire at the last moment of the last day of the term, or the first moment of the next. Notice to quit a Michaelmas tenancy will be valid, therefore, whether it is expressed to expire on 28 or 29 September.42 The requirement for a minimum 12 months notice applies where the notice to quit is given by either landlord or tenant.43(b)Application to Fixed Terms
7.11 The requirement for a minimum of twelve months notice also applies to fixed term tenancies of agricultural holdings that have continued as yearly tenancies under s 3 of the 1986 Act. It also applies to the exercise of a ‘break’ clause by giving notice to terminate during the subsistence of a fixed term tenancy.44 Where the landlord exercises a break clause during a fixed term tenancy, however, the tenant can serve a counter notice under s 26(1) of the 1986 Act.
Although there is no reported authority on the point, it would appear that service of a counter notice in these circumstances will preserve the tenant’s security of tenure as a tenant from year to year.45(c)Waiver of Right to Full Notice
7.12 Landlord and tenant cannot agree in advance (for example in the tenancy agreement) that notice to quit shorter than the statutory minimum be given. If, however, an invalid notice of less than 12 months is given, they are free to agree that it should nevertheless take effect as a valid notice to quit. Where the landlord has served short notice, such an agreement will take effect as a waiver by the tenant of his strict rights under the Act.46 Where the parties agree to accept an invalid notice as effective, however, the period of notice agreed must not be less than is required to enable the tenant to make claims for additional disturbance compensation, or (in rare cases) for ‘high’ farming, on termination of the tenancy. This normally requires a minimum of one month’s notice prior to termination.47 An agreement to waive the statutory notice period and substitute notice of less than one month would, it is suggested, be voided by s 78(1), which prevents contracting out of the tenant’s compensation rights. In this event no valid notice to quit will have been given.48
(d)Exceptions Where Shorter than 12 Months Notice permitted
7.13 Section 25(1) is subject to a number of statutory exceptions, allowing for less than 12 months’ notice to quit to be given. In these excepted cases the appropriate period of notice will be that specified in the contract of tenancy or (if none) six months’ notice to quit at common law. The exceptions are:
(a)Where the tenant is insolvent.49 The tenant is ‘insolvent’ for this purpose if he has become bankrupt or has made a composition with his creditors, or where a receiving order has been made against him. A company is ‘insolvent’ if a winding-up order has been made or a resolution for voluntary winding-up has been passed.50
(b)Where a notice to quit is given pursuant to a provision in the tenancy agreement allowing for the resumption of possession for some specified purpose other than the use of the land for agriculture.51
(c)Where a notice to quit is given by a tenant to his sub-tenant.52 This exception is not restricted to cases where the tenant himself has received notice to quit from the landlord, and it therefore means that sub-tenancies can always be terminated on short notice, subject to the applicability of the security of tenure provisions (see below).
(d)Where the tenancy subsists under an agreement made before 25 March 1947 and either the notice is given by the Ministry of Defence pursuant to the agreement because the property is required for naval, military or air force purposes or where the notice is given by a corporation carrying on a statutory undertaking, by a government department or local authority, where possession is required for a non-agricultural purpose for which the land was acquired or appropriated.53
(e)Where the tenancy is a tenancy for life or lives which, by virtue of s 149(6) of the Law of Property Act 1925, takes effect as a fixed term of 90 years, determinable on the death of the tenant by one month’s notice expiring on the appropriate quarter day.54
(f)Where an arbitrator specifies a date for termination of the tenancy on the tenant’s failing to comply with a notice to remedy, or where there has been an extension of time under a notice to remedy following notice to quit.55
(g)Where following a rent review the arbitrator determines that the rent payable should be increased, the tenant can serve notice to quit of at least six months’ duration, provided it purports to end the tenancy at the end of the first year of tenancy following the increase.56 The practical effect is to enable the tenant to serve notice to quit within the first six months following an increase in rent, terminating the tenancy at the end of the first year of tenancy following the increase (instead of the second as under the basic rule in s 25(1) above, otherwise applicable). Note that this right may be lost if the arbitrator’s award is not delivered prior to the expiry of six months from the review date from which it is to take effect, eg where the arbitrator’s appointment is delayed (or the giving of this award is delayed) by agreement, in order to facilitate negotiations.
(h)Where a tribunal grants a Certificate of Bad Husbandry, they can specify a minimum period of notice of at least two months for termination of the tenancy, and direct that that period shall apply instead of the 12 months’ notice otherwise required.57 The landlord can then serve a notice to quit giving the minimum notice prescribed by the tribunal. The notice must state that it is given pursuant to the tribunal order. The object is to enable the landlord to regain possession quickly in extreme cases of bad husbandry by giving two months’ notice, instead of the minimum of 12 months’ notice. The notice does not have to end at the end of a year of tenancy.58
7.14 In the case of exceptions (g) and (h), the notice to quit will not be rendered invalid by virtue of any term of the contract requiring a longer period of notice to terminate the tenancy.
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